Fiscal conservative? Then expand Medicaid to 218% of poverty

Some Republicans have expressed inclinations to save the federal government money by denying Medicaid to Ohioans, even though it would cost Ohio $1 billion.

Insuring through Medicaid, though, is more than a third less expensive than private insurance.

The table below compares spending on Community Adults in Ohio Medicaid to exchange premiums in Ohio.

* if Ohio doesn’t expand Medicaid

As you see, the federal government would be spending $1300 more per enrollee to put them into the Exchange.

It’s not until we get to 218% of poverty (or $25,090) that the federal subsidy for private insurance in Ohio is lower than the federal cost of Medicaid in Ohio.

This is because Medicaid has far lower reimbursement rates than private insurance. The Exchange could bargain for combined reimbursement rates and achieve some cost savings for the feds, but that would require a governor willing to take responsibility for Ohio’s insurance coverage.

two notes on fudging: I’m assuming that exchange premiums will be around the same as employer premiums, since there’s a similarly large risk pool and no adverse selection. If exchange premiums are higher–then we should expand Medicaid higher yet!

Also, the Medicaid per capita figure ($3315) is from 2009, while the employer insurance figure ($5054) is from 2011. The point remains, though.